The Reserve Bank today said the crisis at the National Spot Exchange (NSEL) has exposed regulatory gaps in systemic institutions and raised the issue of inter-connectedness of financial entities.

NSEL, promoted by Jignesh Shah-led FTIL, is facing the problem of settling around Rs 5,600 crore dues to 148 members after it suspended trade on July 31 on government direction.

"Crisis of NSEL exposes regulatory gaps prevailing in systemic institutions... A loss in one segment of their (brokerage firms) operations can have a cascading effect on other segments, in turn, propagating contagion effects throughout the market," the RBI said in its second quarter review of monetary policy.

The crisis in NSEL has raised the issue of inter- connectedness of financial institutions, the RBI said adding many brokerage firms are active in multiple segments, including equity, commodity and forex.

The government has taken several policy initiatives to plug regulatory deficiencies and has transferred the administrative control of the Forward Markets Commission (FMC), which regulates futures trading on 21 commodity bourses, to the Ministry of Finance.

Spot commodity bourse NSEL plans to settle the entire dues in 30 weeks time, by paying Rs 174.72 crore every week for first twenty weeks, followed by Rs 86.02 crore every week in the next ten weeks.

So far, NSEL has defaulted for 10 times and is able to settle about Rs 180 crore against estimated Rs 5,600 crore dues.